Fifth Circuit Reimposes Nationwide Preliminary Injunction

3 min

After a rollercoaster ride last week, the Corporate Transparency Act's (CTA) nationwide preliminary injunction remains in place for the immediate future, pending further review by the U.S. Court of Appeals for the Fifth Circuit (Fifth Circuit). This means that the deadline of January 1, 2025, for the filing of initial beneficial ownership interest reports (BOIRs) for reporting companies created or registered before January 1, 2024, is no longer in effect. Similarly, any other reporting deadlines are stayed pending the current appeal by the U.S. Department of Justice (DOJ) to the Fifth Circuit. Without knowing whether or when the Fifth Circuit may modify or lift the nationwide preliminary injunction, we recommend that reporting companies be prepared to file their initial BOIRs on short notice.

By way of background and as we reported here, in Texas Top Cop Shop, Inc. v. Garland, the federal district court in the Eastern District of Texas (Sherman Division) issued an order for a nationwide preliminary injunction against the enforcement of the CTA on December 3, 2024.[1] After the District Court's order on December 5, 2024, the DOJ filed its notice of appeal to the Fifth Circuit on behalf of the Financial Crimes Enforcement Network (FinCEN) of the U.S. Department of the Treasury. On December 11, 2024, the DOJ filed with the District Court a motion to stay the preliminary injunction pending appeal, which the District Court denied on December 17, 2024.

Thereafter, the DOJ filed with the Fifth Circuit an emergency motion seeking a stay pending the appeal and requesting that the Fifth Circuit expedite the appeal to the next available oral argument panel. On December 23, 2024, a motions panel of the Fifth Circuit issued an order granting both requests. FinCEN provided an update with some extended filing deadlines, as we reported here.[2] Three days later, on December 26, 2024, a different panel of the Fifth Circuit—the "merits panel"—issued an order vacating the stay that the motions panel had just issued.[3] The result is that the nationwide preliminary injunction is in place. FinCEN confirmed as much with an updated alert posted to its website on December 27, 2024.[4] Oral arguments in the Fifth Circuit case are scheduled for March 25, 2025.


[1] Tex. Top Cop Shop, Inc. v. Garland, C.A. No. 4:24-CV-478, 2024 U.S. Dist. LEXIS 218294 (E.D. Tex. Dec. 3, 2024). The court amended the Order to correct a typographical error on December 5, 2024.

[2] Tex. Top Cop Shop, Inc. v. Garland, 2024 U.S. App. LEXIS 32565 (5th Cir. Dec. 23, 2024).

[3] The pertinent portion of the order states:

The merits panel now has the appeal, which remains expedited, and a briefing schedule will issue forthwith. However, in order to preserve the constitutional status quo while the merits panel considers the parties' weighty substantive arguments, that part of the motions-panel order granting the Government's motion to stay the district court's preliminary injunction enjoining enforcement of the CTA and the Reporting Rule is VACATED.

[4] In pertinent part, FinCEN's alert states:

In light of a recent federal court order, reporting companies are not currently required to file beneficial ownership information with FinCEN and are not subject to liability if they fail to do so while the order remains in force. However, reporting companies may continue to voluntarily submit beneficial ownership information reports [emphasis in original].